https://www.profitconfidential.com/stock-market/early-corporate-earnings-unveil-missing-sales-growth/
Early Corporate Earnings Unveil Missing Sales Growth
Mitchell Clark, B.Comm.
Profit Confidential
2015-04-17T07:42:24Z
2015-06-05 05:41:42 Although we’re still in the early stages, corporate earnings have shown to be steady. This is proving to be promising for investors.
Stock Market
https://www.profitconfidential.com/wp-content/uploads/2015/04/Early-corporate-earnings.jpg As corporate earnings tumble in, equity market action has been more tuned to stronger oil prices. A number of companies have now reported, and the numbers aren’t that bad. It’s still in the early stages, of course, but so far, there have been a lot of good financials. Having said that, sales growth has been missing early this corporate earnings season.

Early Corporate Earnings Season Reporters

Netflix, Inc. (NFLX) added almost five million new customers in the first quarter ahead of its forecast. The company’s sales improved to $1.57 billion from $1.27 billion in the first quarter of 2014. Operating income was flat, comparatively. However, the stock accelerated in subscriber growth.
Intel Corporation’s (INTC) quarterly sales were about the same as the comparable quarter, but corporate earnings improved and earnings per share grew adequately. The stock moved higher on heavy trading volume.
J.B. Hunt Transport Services, Inc. (JBHT) produced two percent comparable revenue growth to $1.44 billion—which was a little light. The trucking company’s corporate earnings improved substantially with operating income growing 32% to $155 million and earnings per share improving 35% to $0.78. All in, it was another solid quarter. The company’s share price just broke through to another all-time record high.
Johnson & Johnson (JNJ) produced excellent corporate earnings growth last year. Management has been telegraphing slower growth for 2015.
According to the company, its first-quarter sales actually fell comparatively by four percent to $17.4 billion. The company reported that domestic sales actually grew 5.9%, but international sales fell materially due to a 13.2% negative currency impact due to the stronger U.S. dollar.
Johnson & Johnson’s net earnings per diluted share were down about 6.7% comparatively. Trading action in the company’s shares was mute after its corporate earnings.
Fastenal Company (FAST) is a good benchmark for fasteners in the manufacturing industry. The company’s first-quarter sales grew almost nine percent to $953.0 million with net earnings improving 14% comparatively to $127.6 million.
Total sales for the company are expected to grow to high single digits this year and low double digits in 2016.
Kinder Morgan, Inc.’s (KMI) quarterly sales were down comparatively to $3.6 billion from $4.1 billion. Softness among energy-related companies is a known market expectation. The saving grace for this company is its dividend. Kinder Morgan said it’s on plan to increase its annual dividend by 15% over last year.

Strong U.S. Dollar Affecting Sales Growth

We’re still in the early days, of course, but we are seeing the expected trend of material U.S. dollar strength affecting sales and corporate earnings. There is some softness in domestic operations on a comparable basis, but there just isn’t enough reporting as of yet to draw any conclusions.
While the stock market does tend to trade off consensus expectation and whether or not a company “beats” the Street, good corporate earnings speak for themselves. I’d attribute less weight to consensus numbers and more to what corporations actually report about business conditions.
Railroad company CSX Corporation (CSX) reported a nice boost to its corporate earnings due to lower oil prices. However, its revenues were flat. At the same time, crude oil shipments this year are expected to flatten out.
The technology sector is going to be the key driver of market sentiment this quarter. (See “Stock Market Slowdown: Soft Data, Earnings Signaling Bull Market End?”) Top-line growth is what’s needed, but it’s the most difficult metric to achieve.

Early Corporate Earnings Unveil Missing Sales Growth

By Mitchell Clark, B.Comm. Published : April 17, 2015

As corporate earnings tumble in, equity market action has been more tuned to stronger oil prices. A number of companies have now reported, and the numbers aren’t that bad. It’s still in the early stages, of course, but so far, there have been a lot of good financials. Having said that, sales growth has been missing early this corporate earnings season.

Early Corporate Earnings Season Reporters

Netflix, Inc. (NFLX) added almost five million new customers in the first quarter ahead of its forecast. The company’s sales improved to $1.57 billion from $1.27 billion in the first quarter of 2014. Operating income was flat, comparatively. However, the stock accelerated in subscriber growth.

Intel Corporation’s (INTC) quarterly sales were about the same as the comparable quarter, but corporate earnings improved and earnings per share grew adequately. The stock moved higher on heavy trading volume.

J.B. Hunt Transport Services, Inc. (JBHT) produced two percent comparable revenue growth to $1.44 billion—which was a little light. The trucking company’s corporate earnings improved substantially with operating income growing 32% to $155 million and earnings per share improving 35% to $0.78. All in, it was another solid quarter. The company’s share price just broke through to another all-time record high.

According to the company, its first-quarter sales actually fell comparatively by four percent to $17.4 billion. The company reported that domestic sales actually grew 5.9%, but international sales fell materially due to a 13.2% negative currency impact due to the stronger U.S. dollar.

Johnson & Johnson’s net earnings per diluted share were down about 6.7% comparatively. Trading action in the company’s shares was mute after its corporate earnings.

Fastenal Company (FAST) is a good benchmark for fasteners in the manufacturing industry. The company’s first-quarter sales grew almost nine percent to $953.0 million with net earnings improving 14% comparatively to $127.6 million.

Total sales for the company are expected to grow to high single digits this year and low double digits in 2016.

Kinder Morgan, Inc.’s (KMI) quarterly sales were down comparatively to $3.6 billion from $4.1 billion. Softness among energy-related companies is a known market expectation. The saving grace for this company is its dividend. Kinder Morgan said it’s on plan to increase its annual dividend by 15% over last year.

Strong U.S. Dollar Affecting Sales Growth

We’re still in the early days, of course, but we are seeing the expected trend of material U.S. dollar strength affecting sales and corporate earnings. There is some softness in domestic operations on a comparable basis, but there just isn’t enough reporting as of yet to draw any conclusions.

While the stock market does tend to trade off consensus expectation and whether or not a company “beats” the Street, good corporate earnings speak for themselves. I’d attribute less weight to consensus numbers and more to what corporations actually report about business conditions.

Railroad company CSX Corporation (CSX) reported a nice boost to its corporate earnings due to lower oil prices. However, its revenues were flat. At the same time, crude oil shipments this year are expected to flatten out.

Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners.